Why Should We Want to “Keep” the Saudis?

That headline question may seem premature, but it’s worth asking if only to reduce the odds that the Saudis are lost as we enter the last perilous year of the Obama Presidency.

Rather than asking “who lost” Saudi Arabia, here’s a better question: why should we want to “keep” them? Perhaps at one time the benefits of having the Saudis as a client outweighed the costs, but those days are long gone. Saudi Arabia is not only a useless and reckless client, but it is increasingly a liability. As we can see from its campaign in Yemen and its destructive meddling in Syria, it is also something of a regional menace. Saudi Arabia inculcates jihadism among Muslims in many countries, supports destabilizing policies throughout the region, wages a pitiless and stupid war against its poorer neighbor, and on top of all that it is an especially abusive despotism. The connection with the Saudis has cost the U.S. an extraordinary amount, especially over the last quarter-century, and it has gained us virtually nothing.

The U.S. hasn’t “lost” the Saudis, and it has been going out of its way over the last year not to, but it wouldn’t be such a bad thing for the U.S. if we did. The Obama administration’s failure here isn’t that they’ve alienated Riyadh, but that they’ve bent over backwards for the last several years to placate them and indulge them. The war on Yemen is the most obvious and appalling example of this, but it is representative of the extent to which the U.S. supports and covers for a client regime that provides the U.S. nothing but headaches and problems.

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16 Responses to Why Should We Want to “Keep” the Saudis?

We are told that we must try to please the Saudis because they are such a valuable “ally.” Indeed. Do the Saudis ever try to please the United States? Apparently not. With the Saudis and Israelis, we have two “allies” with which our relationship is a one way street. We “cooperate” with them, but they don’t have to cooperate with us. Such a deal.

Interestingly, many in the neo-con camp were criticising Obama for having bowed to King Abdullah. Basic theme of the WSJ editorial page: whatever is wrong wherever in the world, it is the fault of feckless Obama policies. Only the Republicans know the Goldilocks options. I guess because Iraq.

To explain the allure the United States has to Saudi Arabia, one must first understand the situation properly. I begin with the year “1973”. That’s when President Nixon asked King Faisal of Saudi Arabia to accept only US dollars as payment for oil and to invest any excess profits in US Treasury bonds, notes, and bills. In exchange, Nixon pledged to protect Saudi Arabian oil fields from the Soviet Union and other interested nations, such as Iran and Iraq. Ever wonder why the United States appears to turn a blinds eye when the Saudis act up? It was the start of something great for the US, even if the outcome was as artificial as the US real-estate bubble and yet constitutes the foundation for the valuation of the US dollar. Think about it, when Saddam Hussein was captured he had a large amount of currency with him, want to guess the country of origins…. That’s it good old U.S. dollars.

By 1975, all of the members of OPEC agreed to sell their oil only in US dollars. Every oil-importing nation in the world started saving its surplus in US dollars so as to be able to buy oil; with such high demand for dollars the currency strengthened. On top of that, many oil-exporting nations like Saudi Arabia spent their US dollar surpluses on Treasury securities, providing a new, deep pool of lenders to support US government spending.

The “petrodollar” system was a brilliant political and economic move. It forced the world’s oil money to flow through the US Federal Reserve, creating ever-growing international demand for both US dollars and US debt, while essentially letting the US pretty much own the world’s oil for free, since oil’s value is denominated in a currency that America controls and prints. The petrodollar system spread beyond oil: the majority of international trade is done in US dollars. That means that from Russia to China, Brazil to South Korea, every country aims to maximize the US-dollar surplus garnered from its export trade to buy oil. Want to see where the next war is, just look at which countries are seeking to move away from the petrodollar. I’ll give you a hint, Libya, Syria, Russia, Venezuela and a few others have spoken of it.

Saudi Arabia still controls the value of the de-facto world monetary standard. They are our biggest ally regarding that wealth. Without Saudi Arabia as our ally, who would control world wealth? The biggest producers of oil and gas. If Saudi Arabia was to become a Russian ally like Algeria, the west, Europe and japan would be second class powers and supposedly third world countries dominated by oil revenues would control the destiny of advanced economies dependent, not only on petro-energy for production and economic growth, but also just to stay warm in the winter.
The way out of that conundrum would be transition to alternate energy and a greener sustainable economy. Instead we have transitioned to a net oil exporter through the magic of fracking. And so we are left where we were before. Dependent on oil as the world’s monetary standard and beholding to a producer who can keep the prices low enough to keep Russia and the others at bay. It is a sorry state to be in, as we watch the expanding Islamic civil war and its pull towards conflict between the super powers. Conservatives may lament the Obama administration support of Sauds war in Yemen, but we, and one party in particular, has been responsible for our remaining in an oily quagmire.

The Saudi relationship hasn’t gained the US *nothing*. It gained an excellent customer for our top defense contractors. And that, I suspect, is the reason our leaders (of both parties) tolerate all their nonsense.

Saudis have killed more US citizens than any other Middle East country. If memory serves a vast majority of the 9/11 hijackers were of Saudi extraction. Who financed the hijackers… a Saudi named Osama bin Laden. Who financed bin Laden … members of the Saudi royal family.

Who is playing games with the global supply of oil so as to bankrupt U. S. companies? None other than Prince Alawaleed – a Saudi and Saudi oil minister Ali al Naimi. Tell me where I am wrong here.

But in addition to the history provided above. No country in the region has been as accommodating to the use space to stage military operations. One could argue, we never such a staging area, but the Saudis have been very accommodating at no small cost to themselves.

Most people have forgotten that the Great Britain and the US placed a lot of pressure on the Saudis to take in Jihadists during and after the Russians moved in and departed Afghanistan. Those same Jihadist have been the most virulent threat to the royal family and elsewhere. While most of my texts remain boxed on the issues of the region, I would recommend reading, “Ghost Wars.”

Given what is happening at no small fault of the current admin. I suspect we will need the Saudis for the near future.

The petrodollar argument is true (to an extent) historically, but not any a valid reason now; the US dollar is reserve currency of the world and changing oil price to another currency is neither a viable option (due to wide dollar reserves held by countries) nor a wise move (as moving to a less stable currency creates more price uncertainty).

Saudi’s provisions of military space is very valuable, but does that give them carte blanche to permit and promote Wahabbism, a main source of Islamic fanaticism that is currently the largest ongoing national security issue in countries throughout the developed world?

Unlike Israel (an ally with no benefit and significant cost), there is value to Saudi Arabia’s relationship with the US. But such value is significantly outweighed by the cost of the evils perpetrated/endorsed and/or permitted by the Saudi government.

Screw the Saudis. They’ve become even more of a menace under this new King Salman. They and other gulf Arabs funded all that became ISIS. They keep pumping out oil to drive the American oil industry into the ground. They’ve intervened militarily in Bahrain and Yemen to specifically put down Shiites. Their brand of Wahabi Islam is of the worst kind and they use their money to spread that venom in other countries through madrassas. They’re extremely misogynistic.